Raj Badarinath, vice president of marketing & ecosystems, RichRelevance
Artificial intelligence, or AI, is a marketing and commerce reality. But thanks to headlines about intelligent devices that eavesdrop on private conversations or order items without customers’ consent, merchants and consumers alike are considering both the full impact of this new technology on the customer experience.
This isn’t simply a conversation for the tech savvy or early adopters. AI has entered the American mainstream, according to a recent shopper survey by RichRelevance. Two-thirds of respondents say they’re at least somewhat familiar with the term. And nearly one-third report that they’re already at least somewhat positive about AI.
In addition, 59% of consumers surveyed are willing to share data in exchange for a better customer experience, demonstrating that consumers hunger for relevant products and offers amidst a sea of competing content, offers and messages. Despite recent negative headlines about how companies misuse customer data, the percentage is comparable to 2017, when 63% of consumers said they welcomed data collection in exchange for better experiences.
The key to this goodwill, however, is transparency. An overwhelming majority of Americans—over 80%—say companies are obligated to disclose their use of AI and how the technology is being applied… Not only must retailers deliver tailored content and apt recommendations based on consumer data, but they must also be willing and able to pull back the curtain and explain what information is being collected, how, and to what purpose.
Furthermore, 40% of respondents say data collection should be anonymous, meaning that information shouldn’t be connected to personally-identifiable customer profiles. Anonymous data in aggregate can effectively be harnessed to predict shoppers’ digital behavior and deliver the most relevant possible mix of products and content based on those predictions.
Reflecting the preference for transparency, survey respondents also approved of AI tools that could be activated on-demand, such as a robot that could point store shoppers to relevant products’ locations in the aisles. On the other hand, consumers considered “creepy” automated features that took decision-making power away from them, such as facial recognition software that would sense when customers entered stores, automatically alert associates, and arm them with customer profile information.
To meet and exceed these transparency expectations, American retailers would do well to take a page in advance from their counterparts in Europe, which is now regulated by the General Data Protection Regulation (GDPR). The legislation mandates that companies provide a way for consumers to see what data they’ve shared, and to revoke that sharing, and is being viewed by U.S. legislators with interest for potential applicability on this side of the pond.
But not all AI products are built equally. Such transparency and control are only possible to expose only if retailers use open AI personalization that allow marketers to audit AI decisions with full visibility and control on the front end. “Black box” AI programs, by contrast, use algorithms that are opaque to both business owners and site visitors, making it impossible to adjust how machine learning is applied and how consumer data is collected and used.
Leading retailers have instituted a granular approach to AI, with controls for both shoppers and back-end merchandisers that display what content is personalized and how. The GDPR-compliant personalization tools use tokens versus personally-identifiable information to build customer profiles, and individual data slices can be “forgotten” at any time. Data is updated every 10 seconds to ensure it reflects real-time preferences.
As long as the role of machines and data remains transparent, businesses can move forward into the brave new world of AI-powered experiences knowing shoppers will follow. Conscientiously-applied machine intelligence can not only win sales, but also instill the trust that is an essential component of long-term loyalty.
RichRelevance provides personalization technology to 37 of the Top 1000 online retailers in North America, according to Top500Guide.com.